Global Journal of Human Social Science, E: Economics, Volume 21 Issue 4

Volume XXI Issue IV Version I 12 ( E ) Global Journal of Human Social Science - Year 2021 © 2021 Global Journals Transforming Financialization and Inequality in a Post-Covid World testimony he delivered in February 1933 would help shape the New Deal. Importantly for the economy today, Eccles astutely recognized that the inequitable distribution of income in 1933 made it incumbent on the U.S. government to spend because leveraged households and businesses were unable and/or unwilling to do so. This lesson was understood when the pandemic arrived in March 2020. b) Fixing What Ails Solutions to current challenges definitely exist; beyond ideological blinders, the primary question is whether the political will exists. Reversing financialization, encouraging creation of public banks, ensuring jobs for everyone who can work (or a universal basic income) and restructuring of the Federal Reserve System would be at the top of my list. However, the more important question that will be discussed here is how to create an opening for potential transformation, especially in the current hostile political climate. In my view, that is a far more difficult challenge than developing workable solutions. A deeply troubling trend known as “agnotology” has become apparent in recent years. Robert Pr oc tor has defined agnotology as “the study of willful acts to spread confusion and deceit, usually to sell a product or win favor.” Mirowski (2013) states that, “The aim of agnotology is not so much to convince the undecided, but to fog the minds of anyone lacking the patience to delve into the arguments in detail (which is pretty much everyone).” There is no question that the use of agnotology has exploded in recent years with the growth of social media (Facebook, etc.). Neoliberal think tanks have participated in this effort and have been effective in muddying the waters. One such think tank has argued that the global financial crisis was caused by Fannie Mae, Freddie Mac, and the Community Reinvestment Act (CRA). And many otherwise knowledgeable people believed these false claims, perhaps given a disparaging view of government. In addition, neoliberal think tanks also have argued that climate change is not a problem. The main objective to these statements and the research that “supports” them, is to delay action by creating confusion in the “marketplace of ideas.” These think tanks have successfully managed to scuttle serious efforts to develop workable solutions to real-world problems. Rather than assemble a wish-list of changes that will not be adopted, perhaps the more important question is to examine how and where change is likely to begin. There is no easy answer to this question. Hayek and the MPS met with success in reshaping thought, arguing that free markets are preferable to states and politics. Friedman became the chief marketer for the notion that “market good, government bad,” regularly utilizing the invisible hand of Adam Smith in defense of the neoliberal program. His argument took hold as the postwar compromise deteriorated. Karl Polanyi (1944) stated that part of the appeal of the “free market” (“laissez-faire”) of the 1920s was the promise that it made to excise government in favor of the invisible hand. In the words of Ronald Reagan, “government is the problem.” Polanyi correctly stated that this promise was “utopian,” meaning impossible to achieve. Democracy, open discussion of ideas, development of policies, etc., is a messy business. If long-term solutions are to evolve in response to current-day challenges, it is not entirely clear where they will emerge. Fortunately, several books have recently been released from outside the economics and financial markets profession that discuss these issues. Robert Putnam (2020) examines the origins of the New Deal in the Progressive Movement that materialized from the 1890s until 1920, before going on hiatus for a decade. It returned with the election of FDR in 1933, as many of his advisors had themselves participated in the Progressive movement. Importantly, Putnam notes that the Progressive movement “did not have a national blueprint in mind at the start.” Perhaps most relevant to today, the movement was “intensely pragmatic,” and “not premised upon ideological beliefs.” Many of the proposals that emerged evolved out of local communities before they became national programs. Putnam calls on people to build a “grassroots, issues-based movement,” noting (in the words of E.J. Dionne, that “Democracy is a long game.” If long-term solutiions are to evolve in response to current challenges, they will likely originate in civil society, from non-governmental organizations, churches, professional associations, etc. It appears clear, despite the Biden administration, that there is only so much government can do to launch these initiatives. As regards the topic of this article -- the contribution of neoliberal ideology and finance to rising inequality -- perhaps the first step is to understand the drivers of inequality, how financial markets and institutions have impacted the division of wealth, the role of ideology in shaping outcomes, and the reasons why finance is so biased toward those who already own enormous amounts of wealth. We need to understand the impact of financialization on U.S. households and then to scrutinize and understand why economic power morphs into political power. It is important not to fall into the trap of developing purely “economistic” solutions, as I have often in my writing, given that humanity is about much more than the accumulation of wealth. Michael Sandel (2020) states that the grievances today are not only economic, but also moral and cultural. Especially among those voters who feel excluded, Sandel argues the issue is not “simply wages and jobs, but also social